Fri Feb 22, 2013 at 09:12:12 AM EST

Last week, or the week before, the Mackinac Center's college educated professional intern wrote about higher education, arguing that a college degree wasn't all that important to getting a job or prosperity. Then, people pointed out that probably the Mackinac Center's professional intern probably wouldn't have gotten his job had he not gone to college, because the Mackinac Center mostly only hires people with college degrees; and, anyway, it is located in one of the state's most prosperous cities, which also happens to have one of the highest concentrations of college-educated workers in Michigan.

There’s a push to spend more tax money on state universities based on a theory called Talent Mercantilism. But this idea is an ineffective approach to growing the state economy, and will only waste taxpayer money.

Mercantilism was the 17th century idea that the only thing a nation needed to become prosperous was to increase its stock of gold and silver. Talent mercantilists just substitute college degrees for precious metals, assuming that more college graduates are evidence of more talent in the economy.

Actually, bullionism is the theory that the more precious metals that a nation holds onto, the more wealthy it is. Mercantilism is based on the idea that prosperity results from strict government control of foreign trade. It's very strange that someone with a degree in economics would confuse the two. It's even stranger that someone would build a theory around this mistake and pretend that it's mainstream, when in fact a simple Google search of it turns up exactly two pages of entries, most of them involving the words talent mercantilism broken up by a comma or period.

You can see this in the experience of states. The basic theory of talent mercantilism is that adding college graduates leads to faster growth. While it’s true that college graduates have higher incomes than those who are not, you can track the states that are successful at growing their college graduates and those that are successful at growing their economies. It turns out that one has very little to do with the other, as I show here.

Actually, what he shows you is that economic growth takes place faster in economies that are growing in sophistication. It's like comparing the growth of China as it transformed rural, agrarian areas into manufacturing with slow growth in the United States and saying that fundamental Chinese ideas about government meddling in the economy is superior to a free market because the Chinese economy was growing faster than ours.

The economies in his graph that grew the fastest grew largely because of energy booms. And, what goes boom must go bust. Sustainable growth in a state economy trying to compete in a global market for talent and educated workforces? The ones that focus on educating people properly and supporting a robust, dynamic university system tend to outperform those that think there's no reason to invest in higher education.

While we're at it, let's dispense with the underlying argument here, which is that if the state spends more on higher education that it represents some historic record level of appropriations (beyond mere dollars). This isn't true. The state has disinvested in higher education, starting in the 70s (not the last decade, as people like to think), resulting in a shift of the burden of paying for it from the state to individual students. The Mackinac Center's entire premise -- and I mean everything the Mackinac Center publishes on this topic -- is based on the silly idea that every year we keep hurling more and more money at our public universities without ever cutting funding.

That is every bit as much a fantasy as the idea the idea that "Talent Mercantilism" is a mainstream, respected academic theory.

Question: Why would my husband's Fortune 500 finanical institution employer partially subsidize his pursuit of a Master's Degree in Finance if there was not a great economic return on the post-secondary investment in their human capital?

Obviously it can also be used as an incentive beyond pay rate for recruiting the strongest possible employees without saddling them with retirement benefit costs, but I think the answer is also clearly they see the economic benefit to them having a more educated employee and workforce.

I don't think this is being driven by the business community...
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I think this is entirely political on behalf of the Mackinac Center. Anyone who's been in the job market knows that every employer wants highly educated employees, if for no other reason that they tend to be more flexible and willing to find more efficient ways of working.

These are the "arguments" being forwarded by Republicans. This, and referring to direct state appropriations as subsidies. If there wasn't such a frightening chance of them taking hold in our political dialogue, you'd pity the movement.